advanced pay-per-click for ecommerce
DESCRIPTION
Drive up average order value: How YOU can get more products into the buyer's cart Lifetime Value: Do you really understand yours? Additional actions: Combat a longer purchase cycle by sharing valuable content you already have Mobile PPC for eCommerce: Straight talk from Google, plus how to integrate Bing Automate your keyword portfolio? Why you should consider going old-school In this information-dense hour, we'll share right-now strategies for busy marketing leaders (and wannabe leaders) who are under pressure to drive more sales, plus real-life stories of eCommerce PPC successes. We'll answer your questions and send you packing with ideas to implement right now.TRANSCRIPT
Advanced Pay-Per-Click
for eCommerce
TRADA WEBINAR SERIES
Meet Your SpeakersMatt HesslerDirector of Account Management, Trada13 years of PPC and SEO@fasterstill
Meet Your SpeakersBill D’AlessandroFounder, Elements BrandsManages a portfolio of high quality consumer products brands@BillDA
Meet Your SpeakersAnna Sawyer Head of Content, TradaAdWords Qualified, AdCenter EnthusiasticDigital Marketing Educator@annafsawyer
Lifetime Value and Average Order Value
Additional conversion actions
Mobile PPC for eCommerce
Automation or human-driven?
Advanced Pay-Per Click for eCommerceAre you under pressure to drive more sales?
Right-now strategies and real-life eCommerce success.
Why is Lifetime Value so important?
Pay-per-click marketing levels the playing field for advertisers that aren’t giants... because you are rewarded for relevance as well asprice.
YourCompany
But why can the giants of pay-per-click afford to spend so much more on a single click?
These guys know their LTV.
Can Walmart afford to
spend $15 on an ad for a
$10 stapler?
Can Walmart afford to spend $15 on a click for a $10 stapler?
Big companies know how much they can afford to acquire a customer.First understand your Average Order Value (AOV)and your Lifetime Value (LTV)
Understanding these metrics isn’t difficult, but you will need to know them to be able to compete in PPC.
How much can you pay for a sale?
It seem reasonable that if you are selling a t-shirt for $10,and your profit margin is 50%,
you can only spend $5on a PPC ad marketing that t-shirt
But...in order to break even.
Look a little closer.
$70your Average Order Valueis $70
and once you’ve sold to a customer,
they tend to buy from you
6x/year for 5 years.Plus, you have an awesome referral program and your average customer refers 1 friend.
because you market to them effectively,
What Can You Afford to Acquire a Customer? | DON’T LOSE TO THE COMPETITION
ADVERTISE ON
Want to know more? Learn how Trada can improve your ROI. Contact us today for a tour! e: [email protected] p: 877-871-1835 w: trada.com
Understanding Lifetime Value (LTV) Lifetime value is the amount of revenue an average customer will generate during the span of their relationship with your business, and it’s another easy-to-calculate metric. When you understand your LTV, you can compare the revenue generated by a customer to the costs associated with acquiring it - and set an effective CPA.
This will give you a very basic number. You may choose to consider additional values, such as discounts given or the amount of referral revenue a customer brings over her “lifetime”.
CONSIDER THIS VERY BASIC EXAMPLE
A health club sells membership packages. The club has three packages at different prices, and their calculated AOS is $110.
An average customer pays once per month, and is retained as a customer for 18 months. The health club makes a 50% profi t margin on each customer after the costs of staffi ng, facilities and insurance.
The health club’s most basic customer LTV is $990.
The health club also knows that one in three health club customers refers another customer. This means that each customer refers, on average, $330 of business. Now, the average LTV for a health club customer is $1320.
LTV=
# of TransactionsNUMBER OF TRANSACTIONS PER MONTH
# of MonthsAVERAGE NUMBER OF MONTHS AVERAGE CUSTOMER IS RETAINED
$ of Average OrderAVERAGE ORDER SIZE
Profit MarginPROFIT MARGIN PER CUSTOMER
xx
x
$990=
1 TransactionNUMBER OF TRANSACTIONS PER MONTH
18 MonthsAVERAGE NUMBER OF MONTHS AVERAGE CUSTOMER IS RETAINED
$110.00 Average OrderAVERAGE ORDER SIZE
50%Profit Margin
PROFIT MARGIN PER CUSTOMER
xx
x
In this simple equation, determine how many transactions an average customer makes in a month, and multiply it by the number of months a customer tends to last. Then, take this number and multiply it by your AOS. Finally, multiply by the percent profi t margin you make from each customer over her “lifetime”.
The health club’s most basic customer LTV is $990.
So how much can you spend to acquire a customer?
Assuming a 60% profit margin per customer, your customer LTV could be as
much as $1260.
It gets even more interesting!
Your buyers don’t all look the same.
Calculate LTV for your different buyer profiles. You may be able to spend more to acquire customers who spend more.
calculating
Lifetime ValueLifetime Valuea case study » One way to analyze acquisition strategy and estimate marketing
costs is to calculate the Lifetime Value (“LTV”) of a customer. Roughly defined, LTV is the projected revenue that a customer will generate during their lifetime. In this graphic we’ll briefly cover how to calculate LTV and how to use LTV to help solidify your marketing budget. Special thanks to @avinash.
Case Study: StarbucksDespite the shaky economy, Starbucks is opening new stores around the world. In 2012, Starbucks expects to open 600 new locations internationally, about 25 percent of which will be in China. It’s no secret that Starbucks’ acquisition strategy is closely scrutinized and routinely copied. Using rough sales figures from 2004, we’re able to estimate the LTV of an average Starbucks customer. The sales data from Starbucks may not reflect current marketing trends, and is only provided to illustrate the steps necessary to calculate LTV.
»
$$$
$$
$
$
$$
You’re up against giants.
Source: KISSMetrics
average ltv
$14,099
How much have you spent at Starbucks in your lifetime?
But you’re more advanced than most.
Huge companies live and die by LTV metrics. They have a ton of data velocity and they analyze it constantly.
SMBs and mid-market companies usually aren’t that smart. The vast majority of businesses use a very basic cost-benefit analysis.
(This paper will help you.)I’ll share this whitepaper in your follow-up email after the webinar.
Increase AOV, and you can spend more in PPC.
Free shipping with an order threshold
Would you like fries with that? (Related items)
Classic upsell (Most popular!)
from buycostumes.com
Not included: sword and shield
Combat a long purchase cycle
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Stay on the radar with additional actions like newsletter and blog signups.
Offer value and keep your company top of mind for the buyer.
Prompt a buy earlier by sharing product announcements and sales.
Measure and track what customers order over time, and look for patterns.
Use a data-driven approach–and talk to your customers.
Research what your competitors are doing to increase cart size, and read forums/blogs to see how people use your products.
Listen to your customers. Survey and call them.
The state of mobile PPC for buyers
Mobile search makes up 25% of all searches.
- Covario 2013
4 out of 5 smartphone owners use their devices to shop, and 25% engage in online shopping exclusively via mobile.
- Radware 2012
Buyers use mobile to research, to compare in-store, and to make purchases.
The state of mobile PPC for eCommerce advertisers
Once again, you have an advantage. While the biggest retailers are really investing in mobile...
... the vast majority of mid-market and smaller advertisers don’t have a sophisticated strategy.
Google’s enhanced campaigns
The enhanced campaigns update will force the issue for eCommerce marketers. You need to make sure you’re prepared to take advantage of mobile.
Mobile for eCommerce: 3 steps
1 Responsive design means your website is built to be readable, usable and conversion-centric on any device.
If you don’t have a responsive site, you may already have mobile-optimized pages hosted in a sub-directory. Enhanced campaigns makes it very easy to select URLs and set their device preference.
Make sure you have landing pages designed to handle a mobile buyer.
2 Determine different click costs and conversion rates for all devices. This will help you understand mobile’s impact on your business and will help you set your bid multipliers.
Important Considerations Before Switching To Enhanced Campaigns
WITH TRADA, ADVERTISE ON
Want to know more? Learn how Trada can improve your ROI. Contact us today for a tour! e: [email protected] p: 877-871-1835 w: trada.com
In this screenshot, mobile represents about a quarter of overall spend. This is a substantial share of spend, which means:
1 - Mobile is important to this business
2 - We need to be careful as we transition to enhanced campaigns
CONCERN:
You may notice that CPAs for computers and tablets are roughly equal to each other, but mobile CPA is 50% higher. Why? It looks like bid prices are not the problem—they’re quite a bit lower for mobile, which is normal—but conversion rates on mobile are lower by 66%.
Consideration1
MOBILE’S IMPACT How much does your business rely on mobile and tablets? Here’s how to find out: in the Campaigns view in AdWords, segment by device. Scroll to the bottom of the list to expand Total = all campaigns. Let’s look at the campaign of a real PPC client.
EXAMPLE
Gather data before you switch to enhanced campaigns, to determine bid multiplier settings.
Mobile for eCommerce: 3 steps
3Mobile for eCommerce: 3 steps
Use Bing.
Bing looks more and more like Google
If you’re not on Bing, there are buyers out there looking who can’t find you
Importing your AdWords data is easy–including enhanced campaigns’ mobile settings (coming soon!)
More Enhanced Campaigns.I’ll share this whitepaper in your follow-up email after the webinar.
Automation?
Automation talk is everywhere!
The vast majority of mid-sized companies don’t use big automation tools. You use:
An agency
An in-house solution or team
Yes, we need automation.
One person alone cannot effectively:
update and create ads for each product
take them down when the inventory is out of stock
Constantly A/B test ads and incrementally increase performance
Bid knowledgeably at the keyword level
Model keyword performance and predict results
Big automation tools are really cool.
Real-time relevant content
Data visualization
Predictive analysis
But you need a TON of data velocity to make it work
And you need to be a big fish to be able to afford it
Also, any robot tool still needs a human to manage it
Pros
Cons
We also need people.
An algorithmic product cannot effectively:
Generate highly targeted keywords for buyers, and manage them intuitively
Write compelling ads that think like buyers
Use information from the marketing team’s other programs to inform strategy
Spot errors and FAILS
Hide the fact that it’s a robot, not a person
Expensive, complicated and time-consuming to hire, make space for, manage in-house teams
A large in-house team is required to have time and diversity of strategy to manage complex eCommerce campaigns
Agency models are often motivated to spend your budget. Plus... who’s really doing the work?
People (agencies/in-houseteams) are really cool!
Can solve problems and manage ad campaigns for buyers
You don’t need to build new people when Google changes the rules
Pros
Cons
The ideal scenarioYou could have a team of experts doing the work of PPC on your behalf. They would work with your in-house person, who would manage strategy.
They would be paid based on performance goals you set, meaning they would fight to get YOU results.
They would collaborate within an application that would allow them to see the performance data they need to succeed.
Your in-house team would have control over their strategy and visibility into ALL the data.
You can have both. Trada is the world’s only performance-based online advertising marketplace.
When you join Trada, we assign a highly specialized team of paid search experts (Optimizers) to work on your PPC campaigns.
We have a global community of certified paid search experts.
Optimizers and Trada partners are supported by the Trada Marketplace.
YourCompany
Trada’s Marketplace is where our global community of certified PPC experts work.
Our automated Optimizer Matching™ algorithm makes sure your Optimizer team is qualified based on experience, historical performance and other factors.
Optimizers do work, you maintain control, Trada supports it all.
create and test targeted ad copy generate keyword lists manage bid prices respond quickly to campaign requests
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Your dedicated account manager acts as strategic partner and Optimizer liaison.
Your Optimizer team does the daily work of campaign research, ad copy and testing, and constant refinement.
Goals are finally aligned.
15% of marketers with
their PPC performance
Only marketers are satisfied with their agency’s
The agency model for PPC is outdated. It was designed for
The Trada Marketplace
Your data and brand message are entirely in your control.
Trada is performance based: you set goals, experts work to beat them.
You have a team of highly specialized experts running PPC strategy and execution. Trada gives you a team of highly specialized experts—Optimizers—creating and testing strategies. You know your money is being spent efficiently with proprietary features like the ability to measure return from each network and balance spend.
Your in-house team will be able to direct how the Optimizers spend their time and ensure that their content and strategy are on-brand and efficient. We provide you with no-nonsense custom reporting on your schedule.
Our unique method of goal alignment is not just a feature - it is the driving force in our marketplace. You set goals, your Trada team works to beat them, and they are compensated for their success.
Only 1 in 5 marketers are satisfied with their agency’s performance
Traditional agencies charge a percent of marketing spend. They are motivated to spend your budget.
Trada’s customersSeth from Dr Vita loved that his Optimizer team would react immediately to the need for ads for a new product–within hours, ads would be running live on the networks.
Trada’s customers
We’d love to analyze your current PPC and determine if Trada is a fit for a partnership with you.
Type “I’d like a demo” into the chat box.
?@BillDA
@fasterstill
@annafsawyer
Don’t forget to check your email for these two essential whitepapers!
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